Pfizer Earnings Meet Dirt Cheap Valuations (PFE)

Pfizer Inc. (NYSE: PFE) is out with earnings of $0.62 EPS on an adjusted basis on 58% growth in revenues (due to Wyeth purchase) of $17.33 billion in revenues.  Thomson Reuters had estimates of $0.52 EPS and $16.65 billion in revenues.  The drug giant reaffirmed guidance and the range was put at $2.10 to $2.20 adjusted EPS on $67 billion to $69 billion in revenues.  Thomson Reuters had estimates of 2.16 EPS and $67.3 billion in revenues.  Pfizer said that revenue was boosted by 5% on foreign exchange conversions.

What is more interesting than its numbers is that there has been growth in some of its core drugs and the Wyeth acquisition gives some new arenas for the company.  The long-term growth is still rather small as the 2012 EPS range was put at $2.25 to $2.35 EPS.

These were some of the standout gains in drug sales individually:

Lipitor revenues rose 5% to $2.81 billion.

Lyrica revenues rose 21% to $762 million.

Viagra revenue rose 16% to $491 million.

Celebrex revenue rose 10% to $604 million.

There were many areas that also had negative sales adjustments from last year.  Growth here is small.  So is the P/E ratio.  The growth targets might turn away many old drug investors who used to see growth before “The New Normal.”  Pfizer now trades at under 8-times adjusted earnings per share for 2010 and its dividend yield is about 4.8%.  The company has plenty of dividend coverage if it wants to boost its payments down the road after it has more time to digest the Wyeth deal.

So far shares are indicated up around $15.80 after a $15.48 close and the 52-week trading range is $14.00 to $20.36.

JON C. OGG